Tax-Cutting Straw Men

J.D. Foster / June 09, 2008

A recurring theme among critics of the 2001 and 2003 tax cuts is that they didn’t work to strengthen the economy. This argument was on display in an article today in the Washington Times that the data on the 2001-2007 expansion “provides no support for the claim that tax cuts generated exceptional economic growth”. This is a straw man argument. It is at once technically true, and yet a misdirection intended to hide a greater truth.

The straw man here is the claim that the tax cuts were enacted to produce “exceptional” near-term growth. The proponents of the tax cuts did not make that claim at the time, nor do they claim it today. So the data refute a claim that wasn’t made.

The author of the quote goes on to note that the expansion following the Clinton 2001 recession was not particularly strong. This is also true, and again not surprising. The recession was shallow, so the recovery should be shallow. If I catch a cold and get better, my recovery doesn’t make me into a Superman. Somehow the critics always seem to miss this obvious point.

The misdirection intended by the straw man argument is that these criticisms conveniently fail to speak to the central question raised in the article, or for tax policy today – did the tax cuts help? Of course they did — an answer the hecklers won’t give for their own reasons, and can’t give because they would then be arguing the apostasy that fiscal policy is irrelevant to macroeconomic developments.

Did the tax cuts produce a raucously robust economy? No. Were they advertised to do so? No. The tax cuts were intended to provide a firmer foundation for economic growth, and that’s exactly what they’ve done.